The Bettencourt Affair: The World's Richest Woman and the Scandal That Rocked Paris - Softcover

Tom Sancton was a longtime Paris bureau chief for Time magazine, where he wrote more than fifty cover stories. He first broke the Bettencourt Affair for many American readers with his feature piece in Vanity Fair in 2010. Sancton coauthored the New York Times (and international) bestseller Death of a Princess, a probing investigation of the murky circumstances behind Princess Diana's death. He has also written for Fortune, Reader's Digest, Newsweek, and other leading magazines. A Rhodes scholar who studied at Harvard and Oxford, he is currently a research professor at Tulane University in New Orleans, where he spends part of the year. In 2014, the French government named Tom Sancton a Chevalier (Knight) of the Order of Arts and Letters.

Chapter 1

The Founder

Charles Schueller never expected to be a soldier. Six months earlier, the young man had been a cook in his native Alsace, France's easternmost province. Now he was huddled with 15,000 Garde nationale volunteers in the town of Belfort, trying to defend its heavily fortified citadel against the far larger German force that had besieged them. More accustomed to wielding a frying pan than a rifle, Schueller, like his comrades in the ill-equipped and untrained band, mainly tried to survive until hoped-for reinforcements could arrive. Meanwhile, the Germans pummeled the citadel with their Krupp six-pound field guns, the long-range, rapid-firing weapons that had been decimating French troops ever since the Franco-German war broke out in July 1870.

The conflict had been triggered by a trivial diplomatic incident about which Charles Schueller, the twenty-two-year-old son of a shoemaker, understood nothing. What he did understand was that la patrie was being invaded by the Germans and his beloved Alsace was on the front lines. Like most German-speaking Alsatians, Schueller was a fervent French patriot who would rather die than live under German occupation. The Belfort volunteers-les mobiles-held out until February 18, 1871, three weeks after officials in Paris had capitulated and signed an armistice. Their commander, Col. Pierre Denfert-Rochereau, was thereafter hailed as "the Lion of Belfort" for leading the heroic resistance.

The Franco-German war had far-reaching consequences. Germany was unified under Prussian leadership. The French Second Empire collapsed when the dyspeptic Emperor Napoleon III, unwisely venturing onto the battlefield, was captured and imprisoned. Most important for Charles Schueller, the triumphant Germans annexed Alsace and Lorraine.

Schueller moved to Paris in 1871 in order to remain French. He knew no one in the capital, but soon met and wed Am lie Denisot, daughter of a toolmaker from Burgundy, who worked as a domestic servant for a baker. Shortly after their marriage, they bought a pastry shop on the rue du Cherche-Midi. It was there, on March 20, 1881, at nine a.m., that Am lie gave birth to Eug ne Schueller in a back room. Eug ne was lucky: He was the only one of their five children who survived.

It was an inauspicious beginning for a man who was destined to build one of the world's great fortunes. "Life was very rude and very hard for us," he wrote in a biographical r sum , "and it's in this atmosphere of effort and work that I was raised, under the example of my hardworking parents." Before he went to school each day, he would rise early to help prepare the pastries, an apprenticeship that pointed to a future in the family business.

But the collapse of the Panama Canal Company in 1891 wiped out the couple's savings and forced them to move to the cheaper suburb of Levallois-Perret, where they bought another pastry shop. That turned out to be a big break for Eug ne: His parents supplied bread to the nearby Coll ge Sainte-Croix de Neuilly, an elite private school, which agreed to admit the boy as a student.

Eug ne earned top grades in all his classes before moving on to the Lyc e Condorcet in Paris, another elite school. There again, he excelled in his studies. After taking his Baccalaur at degree-roughly equivalent to two years of college-he entered the Institute of Applied Chemistry, where, as he said with typical immodesty, "I succeeded brilliantly and finished first in my class." Following his graduation in 1904, he took a position as a laboratory assistant to Professor Victor Auger at the Sorbonne. That seemed to map out a respectable but hardly lucrative career as a university researcher.

But then something happened that would change his life. The owner of a large barbershop visited Auger seeking help in developing a synthetic hair dye. At the time hair dyes were not widely used by Frenchwomen, largely because most of the lead-based concoctions that existed were toxic and irritated the scalp. The products were held in such ill repute that the Baroness de Staffe, a sort of nineteenth-century French Miss Manners, wrote in 1893 that their use "damages the brain and the eyesight." Schueller agreed to become the barber's technical adviser, working three hours each evening for 50 francs a month-a modest sum equal to about $260 today.

Even then the ambitious young man chafed at the idea of working under someone elseÕs orders. He soon cut ties with the barber and struck out on his own. Starting with a capital of 800 francs-roughly $4,000 in todayÕs money-he began experimenting with hair dyes in a rented space near the Tuileries Gardens, a vast park laid out in the mid-seventeenth century by the landscape architect Andr Le N™tre, who also created the matchless perspectives surrounding the Ch‰teau de Versailles. A photo from this period shows Schueller sitting next to some kind of mechanical contraption, looking studious with an open book in his hand, dressed stiffly in a black suit and bow tie, his dark wavy hair swept back from his high forehead, and sporting a black mustache. What doesnÕt show in the black-and-white photo is the intensity of SchuellerÕs blue eyes, one of his most striking and defining features.

His first efforts were disappointing, and his attempts to sell his products to hairdressers got nowhere. "It was a very difficult time," he wrote. "I lived alone, cooked my own meals, and slept in a little camp bed in my laboratory, and when I think back on these days, I wonder how I got through it." But he persisted, continuing his experiments, changing formulas, even trying the dyes out on his own hair. "Finally, I had the good fortune, which I think I deserved, to obtain a product of excellent quality that allowed me at last to launch my company."

In 1909, he founded the Soci t fran aise de teintures inoffensives pour cheveux-the French Company of Inoffensive Hair Dyes-a mouthful that he soon changed to L'Or al. The new corporate name was a homonym for the brand of Schueller's first product, "Aur ale," based on a popular hairstyle of the period and playing on the word aur ole, or halo. He could not know it then, but his little business would in time become the world's largest cosmetics firm and generate the enormous fortune that his yet-unborn daughter would one day inherit.

Things moved quickly after that. The same year as he founded L'Or al, Schueller married a young piano teacher named Louise Madeleine Berthe Doncieux, better known as "Betsy." The couple moved to a larger apartment on the rue du Louvre, near the celebrated museum, where Schueller also set up his laboratory, his office, and his first store. An influx of capital from a new partner and the hiring of a full-time salesman-a former hairdresser for the Imperial Russian court-allowed Schueller to expand his activities. He created a hair-dyeing school, recruited representatives to market the product outside of Paris, launched a promotional magazine, and commissioned a well-known artist, Raoul Vion, to create his first poster: It depicted a blond woman whose hair took the sweeping form of a comet, the first graphic image of a brand whose reputation spread quickly around the country.

Schueller was an obsessive worker and a restless thinker. As if running his company was not enough to occupy his mind, he was forever probing new ideas about the organization of industry, the economy, and politics. In his early days, he dabbled with Socialist ideas under the influence of his friend Jacques Sadoul, an ex-schoolmate from the Coll ge Saint-Croix and a future member of the French Communist Party. Around 1910, he became a Freemason, briefly immersing himself in the secret cult of intellectual humanism before leaving it three years later. (He would later become a visceral opponent of Freemasonry-along with Jews and republicanism.)

Schueller's philosophical ruminations, like his business activities, were rudely interrupted on August 1, 1914, by the onset of the First World War. Like his Alsatian father before him, Schueller was determined to fight for his country but, at the mature age of thirty-three, he was assigned auxiliary status. He volunteered for active duty in the army, but was only offered a post as a chemist in an armaments factory. He continued to demand a combat role and finally succeeded in joining the 31st Artillery Regiment of Le Mans. Sent to the front as a liaison officer, he distinguished himself at Verdun, l'Aisne, and other major battles. Schueller's wartime service won him five citations for valor, the L gion d'honneur, and the Croix de guerre, France's highest military decoration. One citation described him as a "peerless liaison officer" remarkable for his "vigor," his "boldness," and his "contempt for danger."

During Schueller's four-year absence from the helm of L'Or al, his wife, Betsy, had run the company so capably that he found his business "flourishing" upon his return from the army in 1919. Her performance could have led Schueller to give her a more active role in the business. But he was a product of his times who considered a woman's place to be in the home, not on the shop floor or the corner office. (In France at that time, women were legally treated as minors who had no vote and only limited property rights.) So Betsy returned to her piano, her homemaking, and, before long, her childrearing: On October 21, 1922, she gave birth to the couple's only child, Liliane Henriette Charlotte Schueller, future heiress to one of France's greatest fortunes.

Meanwhile, the 1920s were roaring. In France, as in America, it was the Jazz Age, and womenÕs styles were changing from the staid prewar fashions: Hemlines were higher, dresses more clinging, and, thanks largely to the influence of Coco Chanel, women started wearing their hair shorter. That was good news for Eug ne Schueller: Shorter hair was easier to dye, and the emancipated spirit of the times freed women to change their color, something that in an earlier era was frowned on by respectable ladies. As the stock markets rose feverishly around the world, LÕOr alÕs business boomed. Its products were now exported to Italy, England, Holland, even crossing the Atlantic to the United States and Brazil. By 1921, the company had permanent offices in London and New York, in addition to the Paris headquarters at 14 rue Royale, near the Madeleine church.

Emboldened by the success of his core business, Schueller began seeking opportunities in areas apart from L'Or al. Shortly after his return from the war, a manufacturer of hair combs sought his advice on a way to increase production of celluloid. Thanks to what Schueller called his "opportune invention" to speed the manufacturing process, the celluloid company increased production tenfold and Schueller became a partner. After engineering a merger with a plastics firm in 1925, he became the director of the new Soci t industrielle des mati res plastiques. Two years later, following a falling-out with his partners, he negotiated his departure in exchange for their shares in an American company, the Valstar Corporation, a manufacturer of paint and varnish. Schueller thus found himself the director and largest shareholder of Valentine, Valstar's French subsidiary. Around the same time, working with the Lumi re brothers, the legendary cinema pioneers, Schueller created a Lyon-based firm called Plavic Film, which manufactured film for movie and still cameras.

Not all of Schueller's adventures succeeded as well as L'Or al. Invited by the new Soviet government to set up a plastics factory near Moscow, Schueller made several trips to Russia between 1926 and 1928, but the experience was a disaster: The promised factory site was far from the capital, the workers' unions interfered with production, and in 1932 the government took over the company. The experience left Schueller, despite his earlier Socialist leanings, with a profound distrust of unions and anything smacking of Bolshevism.

In 1928 he agreed to take over a failing soap manufacturer called Monsavon. But the French soap market was saturated with competitors at the time and Schueller found it almost impossible to sell his product. At one point, he was spending 300,000 francs (worth about $1.5 million today) a month out of his own pocket and even had to mortgage his properties to keep the company afloat. Working with the fledgling Publicis advertising agency, created in 1926 by Marcel Bleustein-Blanchet, Schueller launched a massive publicity campaign, based on radio spots, posters, and newspaper and magazine ads.

In a pitch aimed especially at the rural population, Schueller added milk to the soap formula and circulated posters showing mother cows washing their calves with Monsavon and mooing: "There is nothing better than milk." Another sales tactic was to persuade the French that they were dirty and did not wash enough. Schueller instructed his sales force to "tell people that they're disgusting, they don't smell good and they're not beautiful." The image of the unwashed French multitudes apparently had some basis in fact. In his 1869 travel book, Innocents Abroad, Mark Twain complained that the people of Marseille, a soap-making center, "never . . . wash with their soap themselves." A report by the Rockefeller Foundation, which sent a mission to France to fight a tuberculosis epidemic after World War I, lamented "the indifference of public opinion on questions of hygiene."

The results of Schueller's campaign were impressive: By 1939 Monsavon was on the verge of becoming the biggest soap company in France. Schueller was way ahead of his time in his use of advertising, particularly radio ads, to sell his products. He hired composers and singers to create catchy jingles, created simulated conversations vaunting the merits of his products, and staged spectacular events like hanging a 10,000-square-meter canvas on the fa ade of a Parisian building, hawking L'Or al's O'Cap hair lotion. Jingles for the company's Dop shampoo and Ambre Solaire suntan lotion became classics in the promotional genre. In 1933, Schueller created a slick monthly magazine called Votre Beaut , which he ran in his typical hands-on fashion, approving the layouts, editing the articles, and even writing some of them himself.

Even as his affairs prospered, Eug ne Schueller could hardly be reassured by the turbulence that swept over Europe in the 1930s against the backdrop of the Great Depression. In Germany, HitlerÕs Nazi Party came to power in 1933, reorganized the economy along authoritarian lines, and launched a massive remilitarization. In Italy, Mussolini, in power since 1922, consolidated his Fascist dictatorship and invaded Ethiopia. In the Soviet Union, a totalitarian Communist regime pursued its ruthless program of nationalization, collectivism, and central economic planning. In Spain, Franco crushed the Republicans in a three-year civil war and imposed his four-and-a-half-decade dictatorship. And in France, the Third Republic, the parliamentary regime that had followed the fall of Napoleon III in 1871, teetered on the verge of collapse.

President Paul Doumer was assassinated by a pro-Fascist Russian in 1932. Two years later, on February 6, 1934, violent clashes between police and far-right rioters on the Place de la Concorde left some 30 dead and 2,000 wounded. In a country rocked by strikes, militant syndicalism, unemployment, and political instability-the revolving-door governments of the Third Republic lasted an average of six months-the leftist Front populaire under Socialist L on Blum won a parliamentary majority in 1936 and proceeded to carry out a number of sweeping reforms. Among them: the five-day workweek, graduated wage hikes, nationalization of the...